TY - JOUR
T1 - Effects of minimum wages on youth employment
T2 - The importance of accounting for spatial correlation
AU - Kalenkoski, Charlene M.
AU - Lacombe, Donald J.
PY - 2008/12
Y1 - 2008/12
N2 - The relationship between minimum wage increases and youth employment is investigated using county-level data and spatial econometric techniques. Results that account for spatial correlation indicate that a 10% increase in the effective minimum wage is associated with a 3.2% decrease in youth employment, a result that is 28% higher than the corresponding estimate that does not control for spatial correlation. Thus, estimates that do not take into account spatial correlation may significantly underestimate the negative effect of the minimum wage on teenage employment. Improperly controlling for factors that vary systematically over space can lead to incorrect inferences and misinform policy.
AB - The relationship between minimum wage increases and youth employment is investigated using county-level data and spatial econometric techniques. Results that account for spatial correlation indicate that a 10% increase in the effective minimum wage is associated with a 3.2% decrease in youth employment, a result that is 28% higher than the corresponding estimate that does not control for spatial correlation. Thus, estimates that do not take into account spatial correlation may significantly underestimate the negative effect of the minimum wage on teenage employment. Improperly controlling for factors that vary systematically over space can lead to incorrect inferences and misinform policy.
KW - Minimum wage
KW - Spatial autoregressive model
KW - Spatial econometrics
KW - Youth employment
UR - http://www.scopus.com/inward/record.url?scp=55949130317&partnerID=8YFLogxK
U2 - 10.1007/s12122-007-9038-6
DO - 10.1007/s12122-007-9038-6
M3 - Article
AN - SCOPUS:55949130317
VL - 29
SP - 303
EP - 317
JO - Journal of Labor Research
JF - Journal of Labor Research
SN - 0195-3613
IS - 4
ER -